Watts & Hughes Construction Limited v Biala - [2021] NZHC 290

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-106

[2021] NZHC 290

UNDER the Companies Act 1993

BETWEEN

WATTS & HUGHES CONSTRUCTION LIMITED

Plaintiff

AND

VIJAY BIALA

Defendant

On the papers

Counsel:

D J Jackson for the Plaintiff S Cottrell for the Defendant

Judgment:

26 February 2021

JUDGMENT OF CULL J

[1] The plaintiff’s reckless trading claim against the defendant was dismissed in my judgment dated 17 November 2020. Mr Biala has filed a memorandum seeking costs of $60,419.00 on a 2B basis with a 50 per cent increase to recognise the Calderbank offers made by him, and $18,828.55 in disbursements.

[2] The plaintiff agrees that 2B scale costs are applicable, but challenges the defendants total time allocation, the increased costs application and whether the defendant’s claimed disbursement fees are reasonable or can be said to have been incurred by the defendant.

WATTS & HUGHES CONSTRUCTION LIMITED v BIALA [2021] NZHC 290 [26 February 2021]

Appropriate Time Allocations

[3] Counsel disagree as to the appropriate allocations for various memoranda filed throughout the proceedings, preparation and attendance of the judicial settlement conference and the length of hearing.

Disputed memoranda

[4] The parties dispute the time allocations for six of the memoranda filed. These memoranda largely deal with case management and timetabling issues. The defendant seeks an allowance of 0.4 for five of the contested memoranda. In relation to the memorandum dated 1 July 2019, the defendant seeks an allowance of 0.2 days. Mr Cottrell submits that despite being a revised version of an earlier memorandum, which Counsel have agreed should receive an allocation of 0.4 days, this was a filed memorandum and thus can be properly claimed as a legitimate step in the proceedings. The plaintiff contends that a 0.2 allowance for the first five memoranda and no allocation at all for the memorandum dated 1 July 2019 is appropriate.

[5] I accept the plaintiff’s submission that an allowance of 0.4 is too high. These memoranda involved simple timetabling issues and the provision of a witness list. They are not analogous to the comprehensive memoranda filed for case management conferences that may receive an allocation of 0.4 for 2B costs under sch 3 of the High Court Rules. Such a high allowance for these memoranda may very well amount to an award of costs that were not in fact incurred.

[6] However, I accept that the defendant should receive an allowance for the revised memorandum dated 1 July 2019. The filing of the memorandum was a step in the proceedings. Some allowance is properly required to recognise this.

[7] Accordingly, I award the defendant an allocation of 0.2 for each contested memorandum.

Judicial Settlement Conference

[8] Counsel for the defendant seeks costs for preparation and appearance at the judicial settlement conference on 3 September 2019. This is not a practice under the

High Court Rules. Mr Cottrell argues that, as costs for judicial settlement conferences are provided for under the District Court…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NZHC 290
Decision Date: 26 February 2021

CaseChat Overview and Summary

Watts & Hughes Construction Limited sought a determination of liability for reckless trading against Vijay Biala, a former director of the company. The case was dismissed, and the defendant sought costs on a 2B basis with a 50 per cent uplift for Calderbank offers, and disbursements. The plaintiff contested the time allocations, the increased costs application, and the reasonableness of the claimed disbursements. The court first considered the appropriate time allocations for various memoranda filed and the judicial settlement conference. It found that an allocation of 0.4 days was too high for the contested memoranda, which dealt with simple timetabling issues. However, it allowed an allocation of 0.2 days for the revised memorandum dated 1 July 2019. The court did not award costs for preparation and attendance at the judicial settlement conference, as it was not a practice under the High Court Rules. It did, however, award 2.75 days for appearance at the hearing.

The court then considered the increased costs application. It found that the defendant was not entitled to a 50 per cent uplift for the Calderbank offers, as the plaintiff was not unreasonable in rejecting the offers. However, it found that a 25 per cent uplift was appropriate to recognise the defendant's efforts to settle the litigation prior to the hearing. Finally, the court considered the disbursements. It found that the disbursements had been incurred by the defendant and were reasonable in amount. The defendant's expert witness was necessary and helpful, and his charge out rate was not unreasonable. The court ordered the plaintiff to pay the defendant increased 2B costs in the amount of $44,889.63, plus disbursements in the amount of $18,828.55.

Orders